Helix BBQ: Contract Law-Third-Party Rights - Third-Party Beneficiaries and Assignment of Rights and Delegation of Duties with Explanations

Which of the following is NOT a required element for an intended beneficiary’s rights to vest based on detrimental reliance?

D.The beneficiary reasonably believed that she was a party to the original contract.

Solution: The correct answer is D.

Answer option D is correct. If an intended beneficiary seeks to assert that her rights vested due to detrimental reliance on a promise, she needs to demonstrate the elements of promissory estoppel. Promissory estoppel can be demonstrated when an actual promise led to a material change of position to the actor’s detriment in reasonable reliance on the contract.

Which of the following is NOT a way in which the rights of intended beneficiaries can vest?

A.The contract involves an industry where beneficiary rights are normally understood to vest.

Solution: The correct answer is A.

Answer option A is correct. The rights of an intended beneficiary will vest if: the intended beneficiary sues to enforce his rights; the intended beneficiary detrimentally relies on the promise; the intended beneficiary assents to the contract in the manner required; or the contract explicitly provides that the intended beneficiary’s rights have vested.

Under contract law, which type(s) of third-party beneficiary to a contract has the right to enforce the contract?

B.An intended beneficiary only.

Solution: The correct answer is B.

Answer option B is correct. Under contract law, an intended beneficiary has the right to enforce the contract, but an incidental beneficiary does not.

Under the UCC, what third persons are ordinarily able to sue for breach of a seller’s warranty?

B.All persons who could foreseeably be injured by the goods.

Solution: The correct answer is B.

Answer option B is correct. Under contract law, an intended beneficiary has the right to enforce the contract, but an incidental beneficiary does not.

Who may bring an action against a delegatee for nonperformance?

D.The delegator or the obligee.

Solution: The correct answer is D.

Answer option D is correct. Once there has been a valid delegation of duties, either the delegator or the obligee may sue the delegatee for nonperformance or deficient performance.

Which of the following events would NOT make an assignment of rights irrevocable?

B.The assignment was known to all interested parties.

Solution: The correct answer is B.

Answer option B is correct. An assignment becomes irrevocable if: the assignment was made in exchange for consideration; the obligor has already provided performance to the assignee; the assignment was made to the assignee in writing; or the assignee has reasonably relied on the assignment to his detriment.